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###### Environmental Protection Agency

          - 40 CFR Part 52
          - [EPA-R06-OAR-2011-0031; FRL-9295-8]

# AGENCY:

Environmental Protection Agency (EPA).

# ACTION:

Proposed rule.

# SUMMARY:

EPA is proposing to approve a revision to the New Mexico State Implementation Plan (SIP), submitted by the New Mexico Environment Department (NMED) to EPA on December 1, 2010. The proposed SIP revision modifies New Mexico's Prevention of Significant Deterioration (PSD) program to establish appropriate emission thresholds for determining which new stationary sources and modification projects become subject to New Mexico's PSD permitting requirements for their greenhouse gas (GHG) emissions. Due to the SIP Narrowing Rule, 75 FR 82536, starting on January 2, 2011, the approved New Mexico SIP's PSD requirements for GHG apply at the thresholds specified in the Tailoring Rule, not at the 100 or 250 tons per year (tpy) levels otherwise provided under the Clean Air Act (CAA or Act), which would overwhelm New Mexico's permitting resources. This rule clarifies the applicable thresholds in the New Mexico SIP, addresses the flaw discussed in the SIP Narrowing Rule, and incorporates State rule changes adopted at the State level into the Federally-approved SIP. EPA is proposing approval of New Mexico's December 1, 2010, PSD SIP revision because the Agency has made the preliminary determination that this PSD SIP revision is in accordance with section 110 and part C of the Federal Clean Air Act and EPA regulations regarding PSD permitting for GHGs.

# DATES:

Comments must be received on or before May 16, 2011.

# ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R06-OAR-2011-0031, by one of the following methods:

                        (1)                         *http://www.regulations.gov:*                         Follow the on-line instructions for submitting comments.                    

                        (2)                         *E-mail:*                         Mr. Jeff Robinson at                         *robinson.jeffrey@epa.gov.*                         Please also cc the person listed in the                         **FOR FURTHER INFORMATION CONTACT**                         paragraph below.                    

                        (3)                         *U.S. EPA Region 6 “Contact Us” Web site: http://epa.gov/​region6/​r6coment.htm.*                         Please click on “6PD” (Multimedia) and select “Air” before submitting comments.                    

                        (4)                         *Fax:*                         Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), at fax number 214-665-6762.                    

                        (5)                         *Mail:*                         Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733.                    

                        (6)                         *Hand or Courier Delivery:*                         Mr. Jeff Robinson, Chief, Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal holidays. Special arrangements should be made for deliveries of boxed information.                    

*Instructions:*                         Direct your comments to Docket ID No. EPA-R06-OAR-2011-0031. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at                         *http://www.regulations.gov,*                         including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information the disclosure of which is restricted by statute. Do not submit information through                         *http://www.regulations.gov*                         or e-mail, if you believe that it is CBI or otherwise protected from disclosure. The                         *http://www.regulations.gov*                         Web site is an “anonymous access” system, which means that EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through                         *http://www.regulations.gov,*                         your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you                               ( print page 20908)                            include your name and other contact information in the body of your comment along with any disk or CD-ROM submitted. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses. For additional information about EPA's public docket, visit the EPA Docket Center homepage at                         *http://www.epa.gov/​epahome/​dockets.htm.*

*Docket:*                         All documents in the docket are listed in the                         *http://www.regulations.gov*                         index. Although listed in the index, some information is not publicly available,                         *e.g.,*                         CBI or other information the disclosure of which is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in                         *http://www.regulations.gov*                         or in hard copy at the Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made available by appointment for public inspection in the Region 6 FOIA Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal holidays. Contact the person listed in the                         **FOR FURTHER INFORMATION CONTACT**                         paragraph below to make an appointment. If possible, please make the appointment at least two working days in advance of your visit. A 15 cent per page fee will be charged for making photocopies of documents. On the day of the visit, please check in at the EPA Region 6 reception area on the seventh floor at 1445 Ross Avenue, Suite 700, Dallas, Texas.                    

The State submittals related to this SIP revision, and which are part of the EPA docket, are also available for public inspection at the State Air Agency listed below during official business hours by appointment:

New Mexico Environment Department, Air Quality Bureau, 1190 St. Francis Drive, Sante Fe, New Mexico, 87502.

# FOR FURTHER INFORMATION CONTACT:

                        Ms. Melanie Magee (6PD-R), Air Permits Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue (6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number is (214) 665-7161. Ms. Magee can also be reached via electronic mail at                         *magee.melanie@epa.gov.*

# SUPPLEMENTARY INFORMATION:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

I. What should I consider as I prepare my comments for EPA?

II. Summary of New Mexico's submittal

III. What is the background for this proposed action?

IV. What is EPA's analysis of New Mexico's proposed SIP revision?

V. What action is EPA taking?

VI. Statutory and Executive Order Reviews

## I. What should I consider as I prepare my comments for EPA?

When submitting comments, remember to:

                    1. Identify the rulemaking by docket number and other identifying information (subject heading,                     **Federal Register**                     date and page number).                

2. Follow directions—The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

4. Describe any assumptions and provide any technical information and/or data that you used.

5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified.

## II. Summary of New Mexico's Submittal

On December 1, 2010, NMED submitted a SIP revision request to EPA to establish appropriate emission thresholds for determining which new or modified stationary sources become subject to New Mexico's PSD permitting requirements for GHG emissions. The submitted revisions to the SIP are enacted at 20.2.74.7 New Mexico Air Code (NMAC). Final approval of this SIP revision request will put in place the GHG emission thresholds for PSD applicability set forth in EPA's Tailoring Rule, ensuring that smaller GHG sources emitting less than these thresholds are not subject to permitting requirements. Pursuant to section 110 of the CAA, EPA is proposing to approve this revision into the New Mexico SIP. NMED also submitted revisions to the remainder of the New Mexico PSD program at 20.2.74.9, 20.2.74.200, 20.2.74.300, and 20.2.74.320 NMAC that correctly update internal cross-references to the PSD definitions. EPA is also proposing approval of these revisions pursuant to section 110 of the CAA.

Also on December 1, 2010, NMED submitted revisions to the New Mexico Title V Operating Permits Program at 20.2.70 NMAC. EPA will address these revisions to the New Mexico Title V program at a later date and in a separate action on the Title V Program.

## III. What is the background for this proposed action?

                    This section briefly summarizes EPA's recent GHG-related actions that provide the background for today's proposed action. More detailed discussion of the background is found in the preambles for those actions. In particular, the background is contained in what we call the GHG PSD SIP Narrowing Rule,[1]                                          and in the preambles to the actions cited therein.                

### A. GHG-Related Actions

                    EPA has recently undertaken a series of actions pertaining to the regulation of GHGs that, although for the most part distinct from one another, establish the overall framework for today's final action on the New Mexico SIP. Four of these actions include, as they are commonly called, the “Endangerment Finding” and “Cause or Contribute Finding,” which EPA issued in a single final action,[2]                                          the “Johnson Memo Reconsideration,” [3]                                          the “Light-Duty Vehicle Rule,” [4]                                          and the “Tailoring Rule.” [5]                                          Taken together and in conjunction with the CAA, these actions established regulatory requirements for GHGs emitted from new motor vehicles and new motor vehicle engines; determined that such regulations, when they took effect on January 2, 2011, subjected GHGs emitted from stationary sources to PSD requirements; and limited the applicability of PSD                           ( print page 20909)                        requirements to GHG sources on a phased-in basis. EPA took this last action in the Tailoring Rule, which, more specifically, established appropriate GHG emission thresholds for determining the applicability of PSD requirements to GHG-emitting sources.                

                    PSD is implemented through the SIP system, and so in December 2010, EPA promulgated several rules to implement the new GHG PSD SIP program. Recognizing that some States had approved SIP PSD programs that did not apply PSD to GHGs, EPA issued a SIP call and, for some of these States, a FIP.[6]                                          Recognizing that other States had approved SIP PSD programs that do apply PSD to GHGs, but that do so for sources that emit as little as 100 or 250 tpy of GHG, and that do not limit PSD applicability to GHGs to the higher thresholds in the Tailoring Rule, EPA issued the GHG PSD SIP Narrowing Rule. Under that rule, EPA withdrew its approval of the affected SIPs to the extent those SIPs covered GHG-emitting sources below the Tailoring Rule thresholds. EPA based its action primarily on the “error correction” provisions of CAA section 110(k)(6).                

### B. New Mexico's Actions

On June 24, 2010, New Mexico provided a letter to EPA, in accordance with a request to all States from EPA in the Tailoring Rule, with confirmation that the State has the authority to regulate GHG in its PSD program. The letter confirmed that current New Mexico rules require regulating GHGs at the existing 100/250 tpy threshold, rather than at the higher thresholds set in the Tailoring Rule because the State does not have the authority to apply the meaning of the term “subject to regulation” established in the Tailoring Rule. New Mexico also submitted a letter on September 14, 2010, in response to the proposed GHG SIP Call again confirming that EPA correctly classified New Mexico as a State with authority to apply PSD requirements to GHGs. The September 14, 2010, letter also identifies that NMED is pursuing rulemaking activity to define the terms “greenhouse gas” and “subject to regulation”. See the docket for this proposed rulemaking for copies of New Mexico's June 24, 2010, and September 14, 2010, letters.

                    In the SIP Narrowing Rule, published on December 30, 2010, EPA withdrew its approval of New Mexico's SIP—among other SIPs—to the extent that SIP applies PSD permitting requirements to GHG emissions from sources emitting at levels below those set in the Tailoring Rule.[7]                                          As a result, New Mexico's current approved SIP provides the State with authority to regulate GHGs, but only at and above the Tailoring Rule thresholds; and Federally requires new and modified sources to receive a PSD permit based on GHG emissions only if they emit at or above the Tailoring Rule thresholds.                

New Mexico has amended its State regulations to incorporate the Tailoring Rule thresholds, and has submitted the adopted regulations as revisions to the New Mexico SIP. EPA's proposed approval of the New Mexico revisions will clarify the applicable thresholds in the New Mexico SIP.

                    The basis for this SIP revision is that limiting PSD applicability to GHG sources to the higher thresholds in the Tailoring Rule is consistent with the SIP provisions that provide required assurances of adequate resources, and thereby addresses the flaw in the SIP that led to the SIP Narrowing Rule. Specifically, CAA section 110(a)(2)(E) includes as a requirement for SIP approval that States provide “necessary assurances that the State * * * will have adequate personnel [and] funding * * * to carry out such [SIP].” In the Tailoring Rule, EPA established higher thresholds for PSD applicability to GHG-emitting sources on grounds that the States generally did not have adequate resources to apply PSD to GHG-emitting sources below the Tailoring Rule thresholds,[8]                                          and no State, including New Mexico, asserted that it did have adequate resources to do so.[9]                                          In the SIP Narrowing Rule, EPA found that the affected States, including New Mexico, had a flaw in their SIP at the time they submitted their PSD programs, which was that the applicability of the PSD programs was potentially broader than the resources available to them under their SIP.[10]                                          Accordingly, for each affected State, including New Mexico, EPA concluded that EPA's action in approving the SIP was in error, under CAA section 110(k)(6), and EPA rescinded its approval to the extent the PSD program applies to GHG-emitting sources below the Tailoring Rule thresholds.[11]                                          EPA recommended that States adopt a SIP revision to incorporate the Tailoring Rule thresholds, thereby (i) assuring that under State law, only sources at or above the Tailoring Rule thresholds would be subject to PSD; and (ii) avoiding confusion under the Federally-approved SIP by clarifying that the SIP applies to only sources at or above the Tailoring Rule thresholds.[12] 

## IV. What is EPA's analysis of New Mexico's proposed SIP revision?

                    The regulatory revisions that NMED submitted on December 1, 2010, establish thresholds for determining which stationary sources and modification projects become subject to permitting requirements for GHG emissions under New Mexico's PSD program. Specifically, the submittal includes changes to New Mexico's PSD regulations at 20.2.74.7, 20.2.74.9, 20.2.74.200, 20.2.74.300, and 20.2.74.320 NMAC.[13] 

                    New Mexico is currently a SIP-approved State for the PSD program, and has incorporated EPA's 2002 New Source Review (NSR) reform revisions for PSD into its SIP. In letters provided to EPA on June 24, 2010, and September 14, 2010, New Mexico notified EPA of its interpretation that the State currently has the authority to regulate GHGs under its PSD regulations. The current New Mexico program (adopted prior to the promulgation of EPA's Tailoring Rule) applies to major stationary sources (having the potential to emit at least 100 tpy or 250 tpy or more of a regulated NSR pollutant, depending on the type of source) or modifications constructing in                           ( print page 20910)                        areas designated attainment or unclassifiable with respect to the National Ambient Air Quality Standards.                

The changes to New Mexico's PSD program regulations are substantively the same as the amendments to the Federal PSD regulatory provisions in EPA's Tailoring Rule. As part of its review of this submittal, EPA performed a line-by-line review of New Mexico's proposed revision and has determined that they are consistent with the Tailoring Rule. EPA's Technical Support Document detailing our analysis of the proposed revisions to the New Mexico SIP is available in the docket for this action.

## V. What action is EPA taking?

EPA is proposing to approve New Mexico's December 1, 2010, SIP submittal, relating to PSD requirements for GHG-emitting sources. Specifically, New Mexico's December 1, 2010, proposed SIP revision establishes appropriate emissions thresholds for determining PSD applicability to new and modified GHG-emitting sources in accordance with EPA's Tailoring Rule. EPA has made the determination that this SIP submittal is approvable because it is in accordance with the CAA and EPA regulations regarding PSD permitting for GHGs.

If EPA finalizes our approval of New Mexico's changes to its air quality regulations to incorporate the appropriate thresholds for GHG permitting applicability into New Mexico's SIP, then paragraph (d) in Section 52.1634 of 40 CFR part 52, as included in EPA's SIP Narrowing Rule—which codifies the limitation of EPA's approval of New Mexico's PSD SIP to not cover the applicability of PSD to GHG-emitting sources below the Tailoring Rule thresholds—is no longer necessary. In today's proposed action, EPA is also proposing to amend Section 52.1634 of 40 CFR part 52 to remove this unnecessary regulatory language.

## VI. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Clean Air Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:
    - Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866  ( 58 FR 51735 , October 4, 1993);
    - Does not impose an information collection burden under the provisions of the Paperwork Reduction Act ( 44 U.S.C. 3501  et seq. );                
    - Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act ( 5 U.S.C. 601  et seq. );                
    - Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 ( Pub. L. 104-4 );
    - Does not have Federalism implications as specified in Executive Order 13132  ( 64 FR 43255 , August 10, 1999);
    - Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045  ( 62 FR 19885 , April 23, 1997);
    - Is not a significant regulatory action subject to Executive Order 13211  ( 66 FR 28355 , May 22, 2001);
    - Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 ( 15 U.S.C. 272 note ) because application of those requirements would be inconsistent with the Clean Air Act; and
    - Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898  ( 59 FR 7629 , February 16, 1994).

In addition, this rule does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

# List of Subjects in 40 CFR Part 52

      - Environmental protection
      - Air pollution control
      - Intergovernmental relations, and Reporting and recordkeeping requirements

Authority: 42 U.S.C. 7401*et seq.*

Dated: April 6, 2011.

Al Armendariz,

Regional Administrator, Region 6.

# Footnotes

1.                             “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans; Final Rule.” 75 FR 82536 (December 30, 2010).                    
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2.                             “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act.” 74 FR 66496 (December 15, 2009).                    
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3.                             “Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs.” 75 FR 17004 (April 2, 2010).                    
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4.                             “Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.” 75 FR 25324 (May 7, 2010).                    
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5.                             Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule.” 75 FR 31514 (June 3, 2010).                    
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6.                             Specifically, by notice dated December 13, 2010, EPA finalized a “SIP Call” that would require those States with SIPs that have approved PSD programs but do not authorize PSD permitting for GHGs to submit a SIP revision providing such authority. “Action To Ensure Authority To Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call,” 75 FR 77698 (Dec. 13, 2010). EPA has begun making findings of failure to submit that would apply in any State unable to submit the required SIP revision by its deadline, and finalizing FIPs for such States.                         *See, e.g.*                         “Action To Ensure Authority To Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Failure To Submit State Implementation Plan Revisions Required for Greenhouse Gases,” 75 FR 81874 (December 29, 2010); “Action To Ensure Authority To Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementation Plan,” 75 FR 82246 (December 30, 2010). Because New Mexico's SIP already authorizes New Mexico to regulate GHGs once GHGs become subject to PSD requirements on January 2, 2011, New Mexico is not subject to the proposed SIP Call or FIP.                    
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7.                             “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans; Final Rule.” 75 FR 82536 (December 30, 2010).                    
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8.                             Tailoring Rule, 75 FR 31,517/1.                    
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9.                             SIP Narrowing Rule, 75 FR 82,540/2.                    
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10.                                                     *Id.*                         at 82,542/3.                    
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11.                                                     *Id.*                         at 82,544/1.                    
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12.                                                     *Id.*                         at 82,540/2.                    
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13.                             On December 1, 2010, Governor Richardson also submitted revisions to the New Mexico Title V program. These revisions were not submitted as part of the SIP and NMED did not request SIP approval for these regulations. EPA will take separate action on the title V program revisions in a separate rulemaking.                    
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[FR Doc. 2011-9099 Filed 4-13-11; 8:45 am]

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